Finance MMC delivers his final budget speech
In the 2021/22 financial year, R2.2-b has been set aside for repairs and maintenance.
Nkosindiphile Xhakaza, MMC for finance, ICT and economic development, delivered the Ekurhuleni metro’s budget speech for the 2021/22 financial year at the council chamber in Germiston on May 26.
This would be his final speech in his five-year term as the local government elections will take place in October.
Xhakaza highlighted the impact Covid-19 had on the tourism, trade and investments industries and suggested that foreign direct investment will be critical to propel economic growth and create jobs.
Track record
He said infrastructure is the cornerstone of sustainable service delivery and in the past four-and-a-half years, R24.9-billion was spent on infrastructure projects.
Some of the major investments per department include:
• Human settlements – R4.42-b (mega projects R991.5-million and urban renewal R902.3-m)
• Energy – R3.13-b (electrification of informal settlements R1.05-b and the construction of sub-stations R327.9-m)
• Water and sanitation – R2.96-b (construction of reservoirs and towers R410.3-m, metering R450-m, pipeline R388-m, sewer upgrades R492.6-m)
• ICT – R2.56-b (fibre rollout R469-m, digital city R125.3-m and the ERP rollout R1.1-b)
• Roads and stormwater – R2.76-b (Construction of roads R940.3-m, and construction of stormwater systems R119.6-m)
• Transport – R2.16-m (four taxi ranks were built at R76.8-m and the IRPTN investment thus far is R1.67-b)
• Environment – R1.02-b (parks R451.5-m and cemeteries R142.6-m)
• DEMS – R648-m (fire stations R290.8-m and ambulances/specialised vehicles R193.9-m)
• Economic development – R577.2-m (fresh produce market R138.8-m and business/enterprise hubs R113.5-m)
• EMPD – R538.5-m (policing precincts R103.1-m and vehicles R246.2-m)
• Real estate (upgrading of buildings R454.7-m)
• SHRAC – R431.1-m (swimming pools R118.5-m and new libraries R80.5-m)
• Health and social services – R196.4-m (new clinics were constructed at R54.9-m and early childhood development centres R71.9-m)
Clean audit and financial prudence
The Ekurhuleni metro recently announced they had received a clean audit from the auditor-general of South Africa.
Xhakaza added that Ekurhuleni may have been the only metro to have obtained a clean audit in the 2019/20 financial year.
“This clean audit is proof that this City is committed to good governance and it is a vital step in restoring the confidence of our people in this government.
“This achievement was not a fluke as it comes at the back of multiple back-to-back unqualified audit outcomes,” he said.
Tariffs
“In order to provide relief to our residents and ratepayers, in the last budget address the tariffs within the control of the metro were not increased.
“However, in order to strike a balance between the affordability of tariffs to the hard pressed residents and the financial sustainability of the metro, the tariffs had to be reviewed.”
The reviewed tariffs are as follows:
• The new valuation roll will be effective from July 1. Due to the fact that the value of properties has increased, and new properties came into the valuation roll, ratepayers will somewhat be pleased to know the assessment rates remain unchanged – meaning there is no increase.
• Rand Water indicated a tariff increase of 5.8 per cent. However, due to cost implications to the metro for water storage, infrastructure renewal and refurbishment, repairs and maintenance and reticulation, Xhakaza said the metro is introducing a further 2.2 per cent, taking the total tariff increase to eight per cent.
• Erwat proposes a tariff increase of 17 per cent for sewer purification. To recover these costs, this budget proposes a sewer tariff increase of eight per cent for domestic users and 17 per cent for industrial users.
• A seven per cent tariff increase in refuse removal is proposed.
• The electricity tariff increases are based on Nersa approval of Eskom application. Municipalities are allowed to make a tariff increase of 14.59 per cent to their consumers. The metro has aligned its tariff structure to Eskom so the increase of 14.59 per cent is proposed.
• Sundry tariffs increase by 3.9 per cent in line with CPI guideline provided by National Treasury.
• Burial and cemetery tariff increase by six percent to residents and 10 percent to non-residents. The tariff for cemeteries and crematoriums was not increased last year although the costs thereof increased.
• Municipal bus services tariff will increase by an average of 3.9 per cent to 4.15 per cent depending on the trip.
ALSO READ:
• Tariffs for local facilities and amenities such as library and information services, library auditoriums, arts, culture and heritage facilities do not increase.
Social package
This budget proposes the following indigent relief programme as an effort lessen the economic burden:
• Hundred per cent rebate on assessment rates
• Free refuse removal
• First 50kWh of electricity per month is free. This is a forced reduction from the 100kWh previously provided due to reduced equitable share allocations from national government.
• First 6kl of water and sewer per month is free. As with provision of electricity, this is a forced reduction from the 9kl that was provided in the past.
• Special rates on emergency services such as ambulance and fire-fighting
• Free indigent burial
Budget allocation
A total of R7.8-b in the MTREF and R2.5-b has been allocated to the infrastructure cluster for the 2021/22 financial year.
• Human settlements is allocated R2.4-b (MTREF) and R716-m for the coming financial year.
• Water and sanitation is allocated R1.9-b (MTREF) and R665-m.
• Energy is allocated R1.3-b (MTREF) and R401-m.
• Roads and stormwater is allocated R1-b (MTREF) and R336-m.
• Real estate is allocated R518-m (MTREF) and R194-m.
• Environment and waste management is allocated R581-m (MTREF) and R171-m was set aside.
• EMPD is allocated R269-m (MTREF) and R84-m. An amount of R30-m for new precincts in Kwa-Thema, Germiston North and Benoni has been set aside and R17-m is going to the construction of driving licence and testing centres in Bedfordview and Edleen in Kempton Park.
In the 2021/22 financial year, R2.2-b has been set aside for repairs and maintenance.
Some of the key allocations in this regard include:
• Energy – R900-m for operations to guard against power interruptions
• Roads and stormwater – R396-m for potholes and stormwater systems
• Water and sanitation – R300-m for water leakages and sewer network maintenance
• Environment and waste – R150.5-m for waste disposal sites and waste transfer stations
The provision of service delivery was funded with R1.544-b. These include:
• Mini-dumping sites, refuse removal and litter picking (Enviro) – R417-m
• Temporary ablution facilities for informal settlements – R400-m
• Security services – R386-m
• Cleaning and hygiene – R128-m
• Uniform and protective clothing – R24.9-m
• Land invasion – R20.9-m
• Grass-cutting, sporting and garden services – R47-m
A further R1.1-b has been set aside for sewer purification and the broader waste water treatment programme, including the Erwat plant operations.
“Over the last four years of the fifth administration a number of fiscal management lessons were acquired.
One fundamental lesson is that the current fiscal decentralisation system is not adequate nor commensurate with the assigned powers, functions, responsibilities and expectations of local communities,” said Xhakaza.
“I am proud to point out we are handing over a metro whose finances and systems are healthy, and we can only hope the new administration continues from where we left off and do better.”
